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Concentration in US Labor Markets: Evidence from Online Vacancy Data

Author

Listed:
  • Azar, José

    () (IESE Business School)

  • Marinescu, Ioana E.

    () (University of Pennsylvania)

  • Steinbaum, Marshall

    () (Roosevelt Institute)

  • Taska, Bledi

    () (Burning Glass Technologies)

Abstract

Using data on the near-universe of online US job vacancies collected by Burning Glass Technologies in 2016, we calculate labor market concentration using the Herfindahl-Hirschman index (HHI) for each commuting zone by 6-digit SOC occupation. The average market has an HHI of 3,953, or the equivalent of 2.5 recruiting employers. 54% of labor markets are highly concentrated (above 2,500 HHI) according to the DOJ/FTC guidelines. Highly concentrated markets account for 17% of employment. All plausible alternative market definitions show that more than 33% of markets are highly concentrated, suggesting that employers have market power in many US labor markets.

Suggested Citation

  • Azar, José & Marinescu, Ioana E. & Steinbaum, Marshall & Taska, Bledi, 2018. "Concentration in US Labor Markets: Evidence from Online Vacancy Data," IZA Discussion Papers 11379, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11379
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    References listed on IDEAS

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    1. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
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    5. Alan Manning & Barbara Petrongolo, 2017. "How Local Are Labor Markets? Evidence from a Spatial Job Search Model," American Economic Review, American Economic Association, vol. 107(10), pages 2877-2907, October.
    6. Efraim Benmelech & Nittai Bergman & Hyunseob Kim, 2018. "Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages?," NBER Working Papers 24307, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    monopsony; oligopsony; labor markets; competition policy;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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